If you're planning a real estate project, you're bound to hear a lot about the personal contribution. It's an element that can weigh heavily in your financing file.
A down payment is the amount of money you have available immediately before you apply for a loan. It's a decisive and "reassuring" factor for banks. They see in it your ability to put money aside and manage your budget properly. This starting capital will be a decisive argument when negotiating with your bank.
Building up a personal contribution
As you know, there are no "small savings". The proof is in the personal contribution, which can be built up from several sources:
- your personal savings(home savings plan, Livret A passbook, etc.) ;
- an inheritance or donation;
- a loan from a close friend or family member;
- returns on savings or investment products (passbook savings, life insurance, employee savings schemes, etc.);
- specific loans (PTZ, action logement loan, loans granted by the CAF or pension funds, local, regional and departmental loans, etc.).
The ideal amount
The law does not set any minimum amount for a downpayment. In practice, however, banks generally require a minimum deposit of 10% of the purchase price. The higher your down payment, the better the terms of your loan. However, it's advisable not to invest all your savings in your down payment, so as to keep some leeway to cover any additional costs.
Buying without a deposit: it's not mission impossible... but it is!
Nothing and nobody requires you to have a downpayment to carry out a real estate project. But let's face it: it will be a little more complicated and more expensive. You'll need to present an "ironclad" dossier. The bank will be particularly attentive to the security of your job, your length of service, your income, the stability of your financial situation, the way you keep your accounts... Your banker will be perfectly able to understand that the absence of a downpayment is not the result of a lifestyle that exceeds your income.However, you should be aware that the absence of a downpayment will increase the total cost of the mortgage. The interest rate will certainly be higher.
Marie-Christine Ménoire